HONG KONG (Reuters) - China’s real estate outbound investment in the first six months fell to its lowest level since 2015, property consultancy firm Cushman & Wakefield (CWK.N) said in a report, mainly hurt by tighter controls on lending.

Chinese institutional investors spent $4.3 billion on property overseas in the second quarter, according to the report published late Wednesday, a 45 percent slide from a year ago.

For the first half, the volume dropped 37 percent to $9.9 billion.

This led Cushman & Wakefield to downgrade its forecast on the full-year investment volume to be 40 to 50 percent lower than 2017, compared to an original forecast of a 30 to 40 percent drop.

“Things may get worse before they get better,” said Jason Zhang, head of China Outbound Investment & Advisory Services, Cushman & Wakefield said. “Geopolitical issues will negatively impact investment, mainly into the US market for the remainder of the year.”

In the second quarter, the firm said China’s deleveraging had a bigger impact on investment volume than the country’s new rules on outbound property investment that require the approval of the National Development and Reform Commission for the bulk of the investments.

However, investments in the office space increased from the first quarter, up 44 percent to $3.6 billion, though Cushman & Wakefield expected investment activities in the sector would be limited for the rest of the year.

In terms of destination, Hong Kong maintained a leading position for the fourth consecutive quarter, accounting for almost 80 percent of the global volume in the June quarter. Within the financial city, 88 percent was invested in the office sector.

In the United States, volume continued to slow to $81 million, with only one deal each on office and residential property.